All or Nothing: Calling for an Ambitious Outcome Document for the Fourth Financing Outcome in Seville, Spain in fixing Africa’s debt crisis
The Journey to Seville for the Fourth Financing for Development Conference is set to conclude in a 2.5 day conference from 30th June-3rd July. The Final Draft Outcome Document, ‘Compromiso de Seville’ was approved for adoption through a special session of the FfD4 Preparatory Committee on 17th June 2025. While unanimously adopted, various sections of the texts, unfortunately have tremendously been watered down due to a show of bad faith by several Global North countries including the UK and EU, risking the ambitiousness of FFD 4 as called for by the UN Secretary General, Antonio Guterres.
In his opening remarks at the 1st Preparatory Financing for Development Committee Meeting in July 2024 in Addis Ababa, UN SG Guterres reiterated the call for the reform of an international financial system that is “outdated, dysfunctional, and unfair.”. It is widely acknowledged matter that Africa’s debt challenges are squarely rooted in a global financial system that structurally and systemically undermines its development financing needs and continues to keep it in periodic cycles of indebtedness. He emphasised the unique opportunity that the fourth financing for development conference presents for world leaders to adopt ambitious reforms to deliver long-term, affordable solutions at scale. The continent is structurally fixed as an exporter of raw, unfinished goods, while it imports consumable, finished goods. This, a signpost of historical and colonial legacy of extraction maintained by the former Global North colonial governments. Additionally, institutions such as the International Monetary Fund and the World Bank, which manage and govern international debt, also act as an insurance policy and guarantor for creditors. As a result, debt restructuring mechanisms such as those under the G20 Common Framework[1] continue to be ineffective in providing timely debt relief for highly indebted African countries.
The ambition of FFD 4 was evident from submissions of Global South Countries through the preparatory meetings and intersessional discussions particularly on debt from countries like Pakistan, Brazil, Egypt, Nigeria, and Zambia, Representative groups like the Africa Group, Least Developed Countries(LDC), and the G77 and China. In fact, the Africa group, from the outset, called for the establishment of a global legal framework as a solution to reforming the global financial architecture. The First draft Outcome Document showed promise of ambition under Paragraph 44 (e) and later in the unattributed texts Under Paragraph 43(e), alt 2, that stated, “Building on existing work, the review of the sovereign debt architecture envisioned in the Pact for the Future and the update by the United Nations Secretary-General on progress and proposals, we will initiate an intergovernmental process at the United Nations, with a view to closing gaps in the debt architecture and exploring options to address debt sustainability, including but not limited to a multilateral sovereign debt mechanism”.
However, in the now adopted Compromiso de Sevilla (Seville Commitment) adopted by the UN Preparatory Committee, it was not only a complete watering down of language as proposed and called for by the Africa Group, the Alliance of Small Island States and the Lome Declaration by the African Union following the May 2025 Debt Conference on an African Common Position on Debt, but a show of bad faith seen by some last minute changes. The final text, under paragraph 50(f), while calling for an intergovernmental process, lacks a real commitment to reforms, limiting it to a set of recommendations. Further, it is proposed to a structure that includes dialogue with the Paris Club, the IMF and World Bank with the expectation to promote and design voluntary and not legally binding guiding principles of responsible Sovereign Borrowing and Lending. In the current form, Para 50(f) exposes a clear and unacceptable bias in favour of Global North countries in the protection of existing ineffective and undemocratic mechanisms where they hold decision-making power. The European Union in particular, despite recognising the difficulties of the current international financial system and committing to agreeing in meaningful package of commitments by borrowers and creditors to deal with unsustainable debt, in a surprise turn of events, not only broke silence in the silent procedure process where it pushed for a change in the text in Paragraph 50(f) but also went ahead and disassociated itself; a demonstration of bad faith to the massive efforts of Civil society and Member States from the Global South to achieve ambition in reforms of the debt architecture; fatal stab to the spirit of multilateralism. Other proposals such as paragraph 49 (b), which advances the IMF and World Bank’s 3-pillar approach are similarly problematic as it proposes private sector involvement as a solution for countries assessed not to have solvency problems but need to manage high debt servicing burdens. The dominance and portrayal of the IMF and World Bank as saviors for a better debt architecture as currently outlined in the entire debt chapter of the outcome document is deaf tone to the context of their consistent and undeniable role in keeping Global South countries in debt.
At a time where Africa’s external debt stands estimated at $1.8 trillion, with 24 countries either in debt distress or at risk of debt distress, and governments allocating nearly 16% of their budgets to external debt servicing and reducing spending in social protection sectors in health and education, with declining official development assistance by rich countries who would rather increase their budgets towards military expenditure, Compromiso de Sevilla is a further dissolution of multilateralism and a demonstration of the schizophrenic attitude of Global North countries to continue exerting their harmful policies under the existing undemocratic mechanisms, that will continue to uphold their extractivism agenda from Global South Countries. If adopted as is, Outcome Document would represent a missed historic opportunity to realign the international financial architecture with principles of fairness, inclusivity, and accountability. The stakes are too high for the compromise language endorsed.
As the Fourth Financing for Development conference sets to begin in earnest, AFRODAD calls out the blockers of an intergovernmental process for UN Framework Convention of Debt, and urges all member states to ensure the FfD4 Outcome Document in Sevilla remains relevant, ambitious, and responsive to the massive challenges African countries face today. The power of Africa in disrupting unfair systems remains steadfast and strong as witnessed by the push to have a fair tax system through a UN Tax Convention. The Lome Declaration on Debt is a further commitment by African countries to break away from the shackles of perpetual indebtedness and a determination to achieve the Lagos Plan of Action of accelerating Africa’s socio-economic development. Anything less will be a waste of time and characterize a complete failure of this multilateral process.
[1] AFRODAD (2023), Debt Restructuring under the G20 Common Framework.